What are matching employer contributions?
A-12: Contributions made to a defined contribution benefit plan, such as a 401(k) Retirement Savings Plan, by the employer based on a certain percentage of the employee’s own contribution. For example, an employer may contribute 50 cents on the dollar for each dollar which an employee contributes to the plan on a payroll deduction basis, up to 6 percent of his/her base salary. An employee may become fully vested in his/her Matching Employer Contributions immediately or they may be subject to a vesting schedule based on the employee’s years of service.
Related Questions
- What is the difference between Employer Profit Sharing, Employer Matching and Employee Salary Deferral contributions?
- Is there a rule about when an employer has to deposit matching contributions into the 403(b) account?
- What is the deadline for depositing employer matching, discretionary, or required contributions?
